During his court testimony on Friday, Sam Bankman-Fried said he planned to sell crypto exchange FTX to Binance when he founded it with Gary Wang in 2019. He built FTX to specialize in margin trading and leverage, a niche he believed would make it an attractive acquisition for the largest global exchange Binance.
Bankman-Fried testified he expected Binance would be interested in buying FTX to absorb its margin trading base. Though Binance explored acquiring FTX when it collapsed in November 2022, it ultimately backed out of the deal.
According to his testimony, Bankman-Fried designed FTX as a platform for margin traders to make outsized bets. He believed focusing on this underserved niche in crypto could establish FTX as an appealing takeover for Binance down the line.
FTX grew steadily from 2019, bringing in $20 million in revenue in its first year. By 2021 revenue hit $3 million daily. Bankman-Fried credits FTX’s risk management engine and cross-margin trading features as early selling points.
While Binance never acquired FTX, Bankman-Fried said it provided $80 million in BNB tokens during FTX’s early fundraising. FTX later bought out Binance’s stake with its failed FTT token and other assets.
Bankman-Fried designed FTT to reward exchange users, similar to Binance’s BNB. However, FTT’s collapse ultimately triggered the liquidity crisis that sank FTX in November 2022.
#SBF #FTX #Binance #CryptoExchange #Bankruptcy
